Subsidies account for almost 50% of ‘operating farm surplus’ in 2017

Net subsidies from direct payments totalled at more than €1.6 billion – or 47% – of operating surplus on farms nationwide in 2017.

The figure – which equates to the lowest such percentage since 1996 – was published today as part of the ‘Preliminary Estimate of Output, Input and Income in Agriculture, 2017’ report from the Central Statistics Office (CSO).

The preliminary data – which excludes net subsidies from forestry premiums and levies – represents a 3.7% rise on the 2016 levels.

Meanwhile, the report also highlights that expenditure on ‘immediate’ outputs was up by 2% in 2017 – at €5.2 billion.

The report highlights that increases of 5.6% on feeding stuffs and 6.1% on energy and lubricants contributed to the overall total.

Overall operating surplus up 35.2%

According to the latest CSO data, total on-farm operating surplus increased by 35.2% – pushing it up to almost €3.5 billion – in 2017.

This significant hike contrasts sharply with a modest rise of just 3.6% in 2016.

The overall value of ‘goods output’ by the sector increased by 13.6% – or €958 million – to just over €8 billion.

According to the figures, “intermediate consumption” increased by 2% over 2016 levels to €5.2 billion.

Dairy sector expansion is clearly illustrated as the driving force behind the substantial rise in aggregate farm income, as the value in milk output jumped by more than 45% in 2017.

Operating surplus is calculated by subtracting compensation of employees from so-called ‘factor’ income accruing from farm output.

These figures relate to the operating surplus earned by farmers, plus that earned by agricultural contractors.

It is essentially an estimate of income before deductions for interest payments on borrowed capital, land annuities and rent paid by farmers to land-owners.

It does not include income from non-farming sources and, thus, may not be equated directly to household income.

The estimates are based on data from a combination of sources including: administrative data; industry sources; and several statistical surveys conducted by the CSO, Department of Agriculture, Food and the Marine and Teagasc.